Government exploring new energy source

  • Hon Judith Collins KC

Up to $60 million will be ring-fenced from the Regional Infrastructure Fund to invest in exploring the potential of supercritical geothermal technology which could help secure New Zealand’s future energy needs, Regional Development Minister Shane Jones and Science, Innovation, and Technology Minister Judith Collins say.

Having a secure and resilient energy supply is a priority for the Coalition Government and is critical to rebuilding the economy and giving businesses the confidence to invest.

“Geothermal energy is sourced from extremely hot rock heated by magma. At present, conventional geothermal wells are drilled to a maximum depth of about 3.5km. However, scientists believe that by drilling beyond this, possibly to 6km deep, more energy will be available,” Mr Jones says.

“The energy generated from supercritical geothermal technology (SCGT) could be up to three times greater than current geothermal energy from steam. In the long term this could be a game-changer for New Zealand and potentially internationally, with other countries also chasing solutions to energy challenges.”

Initially only $5 million of the funding will be drawn down for work on the detailed design and cost to drill the first of three exploratory deep wells in the Taupō Volcanic Zone. The Crown will also engage with stakeholders, particularly local iwi and hapū, on opportunities for involvement.

“We will need to fully understand whether the engineering technology to harness the energy can be developed before we consider releasing any further funds beyond the initial $5m,” Ms Collins says.

“Developing and proving the drilling and engineering systems for extracting SCGT will be a big challenge and is globally ground-breaking.”

The initiative will be led by GNS Science and the Ministry of Business, Innovation & Employment (MBIE). The work will be informed by GNS Science research which was funded by MBIE’s Endeavour Research Fund and years of other studies at the Taupō Volcanic Zone.

The Taupō Volcanic Zone is believed to be an excellent site to drill for SCGT as large sources of geothermal heat exist in Taupō at shallow depths and Earth’s crust is thinner there compared to almost every other place in the world.

More use of geothermal energy would reduce emissions and reliance on fuels such as gas and coal, as New Zealand moves to more renewable energy over coming decades,” Mr Jones says.

“Renewable energy, at present, cannot be relied on for our entire energy needs. Hydroelectric generation currently provides 60 per cent of our power needs. However, as this winter has shown, a lack of rain can quickly turn into a crippling issue.”

Ms Collins says the project is a long-term proposition.

“A decision by the Government to start drilling the first well could be made by the end of 2025, with aspirational deployment of the technology between 2035-2040. The payback could be massive if New Zealand, which is known for its innovative approach to problems, succeeds.”

Editors’ note

The Regional Infrastructure Fund is a capital fund with the primary purpose of accelerating infrastructure projects, particularly with a focus on water storage, energy, and resilience, that will make a difference in the regions.

Funding is approved in principle and announced, after which contracts are negotiated. Some funding may depend on completion of business cases. Payments are made once agreed milestones are met. These are set as part of contract negotiations and differ from project to project.

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